the United States Congress voted to authorize $17.5 billion

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In 2005, the United States Congress voted to authorize $17.5 billion in loan guarantees for new nuclear reactors.

According to an article in nytimes.com, the decision was made because the government wanted to encourage the usage of nuclear power, being considered much more effective and less polluting than the other types of energies. Six years have passed since then and the situation is not very optimistic. The economy has been affected in the last period of time by the worldwide crisis, and on top of that, the Fukushima nuclear power plant incident took place. The investors are not rushing in to invest their money into this type of energy. Half of the funds have remained unclaimed. However, it seems that the Congress will stick to the decision it has taken in 2005. On top of that, it will add other $36 billions in nuclear loan guarantees for 2012. There are many who believe that the plan will not be successful. The 2005 plan failed, as the projects never materialized and it is very likely that the 2012 plans will not materialize either.

Neil Wilmshurst, a vice president of the Electric Power Research Institute, a nonprofit utility consortium based in Palo Alto, California, believes that there will be a delay with the 2012 project. On Thursday it was announced that Exelon Corporation, the nation’s largest reactor operator, indents to purchase the Constellation Energy Group. The Constellation Energy Group wanted to build reactors whereas Exelon was firmly against it. If the purchase will take place, the odds for new reactors to be built will be decreased even more. Mr. Wilmshurst said that it is very likely that the nuclear energy will lose its popularity even more in the following years. One of the main reasons why that could happen is the fact that the prices of the natural gases are on a constant decrease. He intends to convince the government to extend the license plans of the running nuclear reactors from 60 years to 80 years.

The Energy Department has identified in 2009 four nuclear power plants which are the most deserving for the loans. However, since then, things have changed a lot. Two of those nuclear power plants have lost their major partners and their future looks grim. The demand for electricity is very low, and in combination with the lower prices of the natural gases, the nuclear energy will take an even bigger blow. The Fukushima incident did not only bring fear and suspicions regarding the nuclear power plants’ safety. It might bring changes in the regulations as well, which could affect the industry in a negative manner even more. So far from those $17.5 billion dollars, only $8 billion have been offered to a twin reactor project from Georgia. The Bush administration offered the $17.5 billion dollars, and it seems that the Obama administration has similar plans.

Obama has stated that by 2035 he hopes that 80 percent of the energy in the United States of America will come from green and non-polluting sources. He intends to use as much of the nuclear, solar, wind, water, and clean coal power as possible. His intentions are great, but it is very likely that he will not succeed. Clark Stevens, spokesman of the White House said that the president considers the nuclear energy to be suitable for his plans, as it does not polluting and it is very effective. The Senate majority leader, Harry Reid, Democrat of Nevada said that there should be more nuclear reactors and that the construction of these reactors would not be possible without the new loans. The Republican Congress approved the loans in 2005. Senator Lisa Murkowski of Alaska, who is now the ranking Republican on the Energy and Natural Resources Committee praised the 2005 decision, stating that it helps he economy, and the environment a lot.

It seems that the majority of the politicians support the decision, considering the nuclear power plants to be essential for the future of the country from various points of view. Mr. Wilmshurst said that the reason why the government is so generous with offering these loans is because they do not actually pay anything. The government borrows money to the investors, and in the end it is the investors who spent the money. The investors usually pay back the money at various intervals, and at the end the government even makes a profit from the deal. It is not certain if these will be the terms with the 2012 plan. However, regardless of the situation, the government takes certain chances. In the ‘80s they made various similar investments and the investors did not respect the deal. If that happens, the government loses all the money it has invested in the projects, which usually are billions of dollars.

The Energy Department officials are confident that the government will be able to find investors for the $36 billions loans. Jonathan M. Silver, the executive director of the loan programs office said that numerous companies are interested in borrowing money from the government in order to construct nuclear power plants. He said that he does not know in how much time these projects will materialize. It could take years, or tens of years, that is unknown. He also stated that by the time the projects will be finalized, the industry could be completely changed. For example the nuclear energy might be highly valued and in that case the investors would make lots of money. Entergy Corporation, of New Orleans intends to build two new reactors in two different places from the country. However, the company does not want to take loans because it is uncertain that the move will be profitable for them.

A spokesman of the company said that a loan will be taken only if the company will make a substantial profit from the move. Michael J. Wallace, a former Constellation executive, said that the government should invest more in the nuclear energy, because currently it is in a disadvantage. He said that the government should offer various tax deductions and incentives to the ones who invest in nuclear energy, just like it does with the other green energy sources. The fact that the carbon tax has been eliminated does not improve the situation either. Henry D. Sokolski, executive director of the Nonproliferation Policy Education Center does not believe that the plan will be successful because the government pays only 80 percent of the construction costs. The investors need to pay the other 20 percent, and the sums can be pretty high.

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